Joseph B. Campbell - Page 12

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          appropriateness of collateral estoppel in essentially factual               
          contexts."  Building on the Supreme Court's analysis in Montana,            
          this Court identified five requirements that must be satisfied              
          for collateral estoppel to apply.  See Peck v. Commissioner,                
          supra at 166-167; see also Commissioner v. Sunnen, supra at                 
          599-600; Popp Telcom v. American Sharecom, Inc., supra at 939;              
          Gammill v. Commissioner, supra at 613-615; Kersting v.                      
          Commissioner, T.C. Memo. 1999-197.                                          
               As articulated in Peck, the following requirements must be             
          satisfied to invoke the doctrine of collateral estoppel:  (1) The           
          issue in the second suit must be identical in all respects with             
          the one decided in the first suit; (2) there must be a final                
          judgment rendered by a court of competent jurisdiction; (3) the             
          party against whom collateral estoppel is invoked must have been            
          a party or in privity with a party to the prior judgment; (4) the           
          parties actually must have litigated the issue and its resolution           
          must have been essential to the prior decision; and (5) the                 
          controlling facts and applicable legal rules must remain                    
          unchanged from those in the prior litigation.  See Peck v.                  
          Commissioner, supra at 166-167.  The party asserting collateral             
          estoppel as an affirmative defense, in this case respondent,                
          bears the burden of proof.10  See Rule 142(a).                              

               10As required by Rule 39, respondent affirmatively pleaded             
          collateral estoppel by an amendment to answer filed by leave of             

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